Fundamentals of Accounting Manufacturing

ARAS

SANTOS MANUFACTURING CO.

TRIAL BALANCE
December 31, 2012

` DEBIT CREDIT

Cash 10,100
Marketable Securities 22,480
Accounts Receivable 38, 000
Allowance for Bad debts 3000
Finished Goods inventory 46,500
Good in process inventory 38, 600
Raw materials inventory 53,800
Factory Supplies inventory 8,000
Land 142,000
Building 360,000
Accum. Dep-Building 86,400
Machinery 350,000
Accum. Dep-Machinery 16,500
Accounts payable 50,500
SANTOS, Capital
??????? SANTOS, drawing 16, 580
Sales 944,000
Sales Returns and Allowances 22,000
Sales Discount 8,800
Purchases 276
800 Purchase returns and allowances
7,800 Purchase Discounts
7,500 Freight-in
22,000
Direct Labor 115,300
Indirect Labor 33,000
Utilities-Factory 38,000
Factory Insurance expense 28,800
Repairs and maintenance-Factory 21,500
Miscellaneous factory expense 33,600
Sales Salaries 64,200
Advertising expense 36,200
Miscellaneous expense 16,700
Office Salaries
23,000 Taxes and licenses
13,000
Repairs and Maintenance-G&A 1,200
Miscellaneous G&A expenses 32,100

TOTAL 1,872,260 1,872,260

ARAS Page 1
 Fundamentals of Accounting Manufacturing
ARAS

Adjustments:

1. Depreciation for the year: Building-5%, Machinery-10%, Office equipment-10%.

Additional machineries were acquired on April 1, 2012 in the amount of 20,000.
2. Unpaid wages in the factory are:
Direct Labor - 8,600
Indirect Labor - 6,300
3. Accounts receivable from a customer for 1,100 is to be written off.
4. Bad debts are estimated at 5% of Accounts receivable.
5. Factory supplies on hand on December 31, 2012 amounts to 1,350.
6. Insurance expense on factory represents premium paid on fire coverage for 1 year
effective March 1, 2012.
7. Accrued office salaries, 3,100.
8. Ending inventory:
Finished Goods 41,500
Goods in Process 31,600
Raw Materials 51, 800

COMPUTE FOR THE FF.

1. TOTAL ASSETS
2. TOTAL LIABILITIES
3. TOTAL CAPITAL
4. COST OF GOODS SOLD
5. COST OF GOODS MANUFACTURED
6. TOTAL MANUFACTURING COSTS
7. PRIME COSTS
8. PERIOD COST
9. GROSS PROFIT
10. NET INCOME
11. GROSS PROFIT RATE
12. NET INCOME IF RAW MATERIALS BEGINNING INVENTORY IS UNDERSTATED BY 2,000.
13. COST OF GOODS SOLD IF GOODS IN PROCESS BEGINNING INVENTORY IS
OVERSTATED BY 8,300.

ARAS Page 2
 Fundamentals of Accounting Manufacturing
ARAS

Answer key:

1) 895,285
2) 68,500
3) 826, 785
4) 577,800
5) 572,800
6) 565,800
7) 409,400
8) 248,595
9) 335,400
10) 86,805
11) 36.73%
12) 88,805
13) 586,100

ARAS Page 3